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How the House Rules Help the Rulers

Thursday, March 3, 2016

I have a friend who likes to gamble. He is a regular casino patron and while he has invited me to go many times, I have always declined. I just don’t like the odds. The games may be legitimate, but they are designed so that the House wins much more than it loses.

My friend mocks me. He says that is not consistent with my decision to run for city council in 2014. In his view city elections may be legitimate but the rules are such that the house or the sitting councillor is virtually assured of victory.

So is he right? Are the odds of winning at Casino Rama better than your chances of defeating a sitting member of Toronto Council?

I do not know much about casino odds, but in the last three Toronto elections 105 members of council ran for re-election and 99 were successfully re-elected. That means you have a 6 per cent chance of beating an incumbent. By contrast, if you look at the last three federal elections in Toronto incumbents won 33 out of 61 times or 54 per cent of the time.

Why are we so eager to throw the federal reps out but give our city councillors a pass? Do we believe our civic leaders are just that much better than their federal counterparts?

Likely not. Perhaps there is something to my friend’s idea that the electoral system works to the advantage of the House.

City staff set a spending limit for each candidate in each ward. The limit or cap is based on the size of the population of the ward. In the last election the cap ranged from between $35,000 to $40,000. You were allowed to spend up to that amount on things like signs, literature, a campaign office etc. Should you exceed that amount the city’s Compliance Audit Committee acting on a complaint from a citizen could decide to launch an investigation. If found guilty, you could potentially have your seat taken from you.

All sounds good and fair so far but there is a second source of money that is not subject to any public scrutiny. These activities are “cap exempt” and include the cost of having your finances audited and your election night party. Fundraising costs are also cap exempt.

Under the current rules you could throw lavish parties complete with an open bar and the cost of those events would not go against your cap. Your fund raiser does not even have to be successful. It could be a financial flop but still the costs would be cap exempt. Raising money may not even be the real intent of the “ fund raiser”. It could really be all about using the event to get people to meet and hear the candidate for the purpose of gaining votes.

If there is an open bar and food at these events those would all be allowable costs and are cap exempt.

Now you might be thinking, if a candidate wants to spend their money on a free bar that is up to them. That is a fair question if the money was actually coming from the candidate or their campaign. It is not. It is coming from public funds.

The City has a donation rebate program which enables those who donate to a municipal candidate to get a rebate of up to 75 per cent of their donation. If you give your local candidate a $100 donation, you will receive a cheque from the City of Toronto for $75. making the actual cost of your donation $25.

The program was established with good intent. It is designed to enable those who have lesser financial means the ability to launch a credible campaign. Like many things, intent and reality are quite different.

If you are at a candidate’s fund raiser and you get a “free” $10. drink, City tax money through the rebate program is actually paying for $7.50 of that drink.
Let me repeat that just so you are absolutely clear what I am saying. Up to 75% of the bar tab is being paid for by the City of Toronto, not the candidate and the cost does not even count under the candidate’s election spending limit.

But why does that advantage the incumbent? Surely other candidates can do this as well? Not really, because even with the rebate program it is more difficult for candidates who are not incumbents to raise money.

In the last election there were 37 incumbents running and 36 of them got re-elected. There were seven wards in which there were no incumbents. So let’s compare the campaign spending of the 37 incumbents to the spending of the 37 candidates who ran second to these incumbents and in one case beat the incumbent.

The 37 incumbents spent $1,846,913 on their campaigns. The average amount spent by an incumbent was $49,916 per campaign.

We only have information on 35 of the 37 second place finishers because two did not file an audit and therefore cannot run in the next election. The 35 second place finishers spent $969,154 or on average $27,690 per campaign which is close to half of what the incumbents spent. A majority of the second place finishers did not even have the financial resources to fully spend up to the cap.

In six of the 37 wards the second place finisher outspent the incumbent and in five of those wards the incumbent failed to get 50 per cent of the vote. The one councilor who lost his seat was one of those five. In total there were only 10 incumbent councillors who failed to get 50% of the vote in their ward. There was only one ward where an incumbent got more than 50 per cent of the vote and was outspent by his opponent.

So the lesson learned is that money does matter and given the openness of the rules and the obvious advantage the incumbent has in fund raising, it is not surprising that they rarely lose.

The City does have a Compliance Audit committee where a citizen who feels a politician has transgressed the rules can ask the Committee do an investigation. In September, Councillors closed that window of democracy. If a citizen now makes a request to the Committee and is unsuccessful, the citizen is now required to pay for any costs the councilor may have incurred in defending themselves before the Committee.

While one can clearly debate the notion that sitting politicians have the authority to set their own election rules, this new rule guarantees that in practice there are no rules in governing the election expenses of politicians in a City election. Under these new rules, no one will file a complaint.

Toronto is an extremely diverse city but we have an electoral system that largely ensures new voices will be excluded. Those are the house rules and it is why those in the House continue to rule.

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